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Verizon-Cable Spectrum Proposal Draws Strong Resistance in Washington

The backlash was swift once the word got out that Verizon and its cable company partners were creating an entity that looks suspiciously like a market cartel to control competition and pricing on the Internet as well as to create technology to control access to some services.

A number of additional companies and consumer interest groups rose in opposition to the revelation that Verizon and several of the largest cable companies in the United States, including Comcast, Cox and Time Warner, were working together to create what looks like a non-competitive Internet market cartel.

As I mentioned in my earlier column on the topic, a group of former adversaries has teamed up to fight Verizons proposed purchase of Advanced Wireless Services (ASW) spectrum owned by several cable companies. But there is more to it than that. The group called The Alliance for Broadband Competition includes such diverse players as Public Knowledge, T-Mobile, Sprint, the Competitive Carriers Association and the Rural Telecommunications Group.

The members of the group may bring back memories of the groups that opposed the AT&T/T-Mobile merger, except now T-Mobile is joining the opposition. While their interests in the Verizon issue vary from group to group, they all agree that Verizon should not be able to buy spectrum from the cable companies and that Verizon and the cable companies should not be allowed to create their so-called Joint Operating Entity (JOE).

Verizon and the cable companies are truly creating an axis of broadband power that threatens competition and consumer choice to their very core, said Carri Bennet, Rural Telecommunications Groups [RTG] general counsel, in a prepared statement.

Further reading

Very quietly, this axis has entered into complex transactions that will forever change how consumers access voice, Internet and video service, which companies these consumers will purchase those services from and, at the end of the day, what those services will cost. Tens of millions of Americans, including those in rural America, are now in the cross-hairs and the Alliance is ringing the warning bell calling for a stop to the onslaught before it is too late.

RTG charged that Verizon and the cable companies are entering into reseller, agency and joint-venture relationships that impact how consumers access the Internet. RTG said in its statement that the organization is planning to educate the FCC and the Department of Justice as to what Verizon and its cable partners are really up to.

Verizon has not responded to requests for comment on the JOE and reaction to the opponents statements.

The Competitive Carriers Association takes a similar stance. The organization of small wireless carriers said in a filing to the FCC that Verizon doesnt need more spectrum, especially at the cost of marginalizing smaller carriers. In a prepared statement, CEO Steve Berry said that the Verizon deal needs to be looked at very carefully by the FCC.

The Verizon-Cable deals require strict scrutiny, enforceable conditions helping to restore the competitive marketplace, and divestiture in markets where the transfers are not in the public interest, Berry said. Spectrum divestitures should be imposed by the FCC, not selected by Verizon, and the FCC should be more concerned with requiring interoperability and commercially reasonable roaming than ever. Now is the time for the FCC to insure policy decisions that contribute to a competitive wireless market, he added.

Public Knowledge, meanwhile, wants to make sure that the government knows about the JOE, and contends that its a huge threat to the public.

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